Employment

EMPLOYMENT

general impact on studentskatherine l. hughes

employers' perceptions of employment readinessjohn maslynmark cannon

reasons students workkatherine l. hughes

GENERAL IMPACT ON STUDENTS

Paid employment begins at a relatively young age in the United States. While exact figures vary, depending on the means of measurement, a survey published in 2000 by the U.S. Department of Labor found that half of American twelve-year-olds have had some kind of work experience. While at such young ages work experiences tend to be informal and short-term, as American youth progress through their teenage years their work becomes more formal and more time-consuming. Researchers have been paying increasing attention to the effects on youth of working. In general, the results from this body of research lead to neither a blanket endorsement nor a condemnation of school-aged youth working for pay.

There have been several phases of research on youth and work. Before 1970, researchers paid almost no attention to students' paid work. The influential report of the Coleman commission of the President's Science Advisory Committee (1974) blamed schooling–because it isolates young people from adults and from productive work–for actually retarding youth's transition to adulthood. The report called for placing young people into work situations earlier, as a tool for social development. Presumably, work would provide a valuable educational experience, even if the work took place in an occupation not related to the eventual employment.

As national surveys in the 1970s and 1980s were demonstrating that paid youth work was very common, Ellen Greenberger and Laurence Steinberg's When Teenagers Work, which reported the results of research on primarily middle-class youth in California, brought attention to some negative consequences of work. This spurred a lively debate and further study among academics. In particular, some feared that work could have negative consequences on school engagement and performance. While youths tend to work more during the summer than during the school months, some data show that the majority of high school juniors and seniors do work during the academic year. At the start of the twenty-first century, researchers have been turning their focus to the quality of young people's jobs and proposing to increase jobs' learning content through formal linkages with school curricula.

In contrast to the concern over too much working, some find access to work for minority and low socioeconomic status youth to be a greater problem. Working during high school does reduce the risk of unemployment later. Racial and ethnic disparities in teenage job-holding and in the number of hours worked are well-established. Multiple studies indicate that minority teenagers, and teens in poor families and families receiving public assistance, are less likely to work than white or higher socioeconomic status youth. As Jeylan T. Mortimer and her colleagues reported in 1990, "employment is very much a middle-class phenomenon" (p. 208). In one study of several hundred youth in Baltimore, African-American youth reported equal or greater jobseeking as white youth but lower rates of obtaining jobs. Hence African-American youth started working later, and were less often employed. The U.S. Department of Labor reported in 2000 that African-American and Hispanic youth have much higher unemployment rates than do white youth. However, when they do work, Hispanic youth work more hours during the school year than do other youth.

Young people's first paid jobs tend to be informal (or "freelance jobs," as the U.S. Department of Labor refers to them), such as child care and lawn work. According to Mortimer and associates (1990), girls tend to start paid work earlier, yet their first jobs are more likely than those of boys to be of the informal type and concentrated within a smaller number of areas. Of the ninth-graders in this study, most of the girls were working in private households while the boys were more divided among informal work, sales work, and restaurant work.

Research has established that there are sex differences in industry and occupation of young workers. Male and female youth are about equally likely to work in eating and drinking places, with about 27 percent of fifteen-year-old boys and 31 percent of fifteen-year-old girls working in such establishments, but males are more likely to be employed in the agriculture, mining, construction, and manufacturing industries. Boys fifteen to seventeen years of age are much more likely to work in farm, forestry, and fishing occupations, as well as blue-collar occupations, while girls of the same ages tend to work in sales occupations such as cashier (this is true for the school year and the summer months).

Youth tend to give the reason for working as "to buy things," noted the Mortimer study in 1990. Katherine S. Newman makes the point that teenagers from poor families in particular need to work so that they have money with which to participate in youth culture, yet Doris R. Entwhistle and associates reported that lower-status youth are more likely than other youth to share their earnings with their family. The young fast-food workers in Harlem that Newman studied also sought work as a place to escape from violence in their own neighborhoods.

Earnings for teenage workers are generally just above minimum wage; in 1998 median earnings of fifteen- to seventeen-year-olds were $5.57 per hour, while minimum wage was $5.15. Hourly earnings do increase with age. White and Hispanic males tend to have the highest median hourly earnings while Hispanic and African-American females have the lowest. Mortimer's 1990 report found significant wage differences between boys and girls overall, with boys reporting a higher mean wage.

Employment after School and Effects on Academic Outcomes

The propensity of American youth to work (and often to work a significant number of hours) during the school year has led to debate among researchers and policymakers about the effect of this work on young people, particularly on their academic engagement and achievement.

According to the U.S. Department of Labor, during the 1996–1998 school months, 39 percent of seventeen-year-olds were employed during the average month. This method of measurement, tabulating the percentage of young people employed at a particular point in time, minimizes the extent of youth work; when students are asked if they have ever worked during their high school years, figures are significantly higher. An analysis of National Longitudinal Survey of Youth (NLSY) data in 1995 by Michael Pergamit found that about 64 percent of juniors and 73 percent of seniors said that they had worked at least one week during the school year.

The concern over youth working while in school emanates from two perspectives. One focuses on the amount of time spent at the workplace, reasoning that time spent at work is likely to be time taken away from academic pursuits such as homework. While young people work longer hours during the summer than they do during the school year, the number of hours spent on the job in the academic months, about 17 per week according to the Department of Labor, is still significant. Another concern is about the low quality of the jobs youth tend to hold. As noted above, young people tend to start with informal jobs, such as child care and lawn work, with the majority then moving into the retail trade industry, which includes eating and drinking places such as fast-food outlets. There is the question of whether youth gain developmentally at all on the job, given the low-level positions they tend to have. Young people themselves say they work to earn money to buy things and save for college, rather than to add to their knowledge or skills.

In general, an examination of the literature on youth working while in high school finds costs and benefits, and some of the literature is conflicting. In terms of effects on academic achievement, some researchers have found a negative relationship between the number of hours worked during the school year and both high school and postsecondary school attainment measures. However, David Stern and Derek Briggs reviewed the literature and concluded that the relationship between hours of work and performance in school actually follows an inverted-U pattern, meaning that students who work more moderate hours perform at a higher level in high school than students who work more heavily or not at all. This pattern appears to extend to postsecondary achievement as well; Department of Labor analysis of NLSY data shows that teenagers who worked twenty or fewer hours per week while in high school were more likely to have achieved at least some college education by age thirty than those who had worked more than twenty hours or not at all.

However, some researchers contend that the observed effects are spurious because they do not take into account preexisting differences between students who work and those who do not. And some of the research is not able to fully sort out the direction of causality. For example, students who are not already performing well in school may seek more hours at their paid jobs, rather than spending long hours studying. Researchers have also questioned the zero-sum assumption that hours on the job are hours not spent in study. An analysis of longitudinal data by Mark Schoenhals, Marta Tienda, and Barbara Schneider found that youth employment lowered the amount of time spent in watching television, not the time spent reading or doing homework.

Employment during the Summer

Youth are more likely to work during the summer than during the school year, and according to the Department of Labor, 20 percent of employed youth aged fifteen to seventeen work full-time over the summer months, compared with 6 percent during the rest of the year. Mihaly Csikszentmihalyi and Barbara Schneider report that youth from higher-income families generally have more work experience and are particularly more likely to work solely in the summer.

Employed youth aged fifteen to seventeen tend to work in similar industries in the summer as they do during the school year, with the majority working in retail, which includes eating and drinking establishments. However, in the summer the proportion in retail declines somewhat as teens take more jobs in agriculture, construction, and service industries. Csikszentmihalyi and Schneider note that affluent teenagers tend to have jobs such as camp counselor and lifeguard, likely reflecting their tendency to work only during the summer and the opportunities available in their communities, while working-class youth were found more likely to hold positions in fast-food outlets. Hourly earnings for youth working during the summer versus the school months are about the same.

In the research literature there is much less concern about, and hence much less attention given to, paid work that students perform during the summer months. One study that did attempt to measure the costs and benefits of summer work to youth found that summer employment had positive effects on post–high school employment status and other outcomes. According to Herbert W. Marsh, no negative effects were found. Thus the summer employment problem may be better redefined as the difficulty that minority and low socioeconomic status youth face in gaining access to valuable paid positions. As noted above, there are racial and ethnic disparities in teenage job-holding and in the number of hours worked. While the federal government has long funded summer job programs aimed at youth with serious barriers to employment, the 1998 Workforce Investment Act changed the focus to year-round services, eliminating the separate appropriation for summer activities.

Effects on Psychosocial Outcomes

There is no doubt about the importance of the work role in adulthood, thus most recognize that for an adolescent, taking on a new social role as worker can be a formative experience. Yet there is considerable debate about whether the experience affects the development of youth positively or negatively. In addition, there may be sex differences with regard to developmental impact, as girls and boys tend to have different types of jobs, particularly in their early teens.

Some researchers question whether youth gain any skills at all on the job, given the positions youth have and the workplaces they are in, and argue, as do Greenberger and Steinberg, that youth work can lead to stress as well as to adult behaviors such as alcohol use. Studies do report that working is associated with "problem behaviors" such as substance abuse and other delinquent activities; Mortimer, Carolyn Harley, and Pamela Aronson provided a review of a number of these studies in 1999. Again, however, the direction of causality is difficult to determine.

Most research finds that the general public regards youth work positively, believing it to have developmental benefits. For example, a study by Mortimer and associates published in 1999 examined parents' retrospective views of their early jobs, as well as their attitudes toward their children's work. The parents were enthusiastic about working during adolescence, listing a variety of competencies they believed they had acquired as a result, such as gaining a sense of responsibility, money management skills, discipline, and so on. Not surprisingly, then, the parents had favorable attitudes about their children's employment. The children reported benefits of working quite similar to those their parents had reported.

With regard to skills learned on the job, a study of youth working in fast food argues that these positions do yield skills, as they require much in the way of information processing, coordination, and responding to unpredictable events. Youth also must learn to handle customers, which can help them to develop what Newman characterizes as "people skills." Other research has found that even positions such as child care can develop innovative thinking skills in and provide challenge to young people. Mortimer and Catherine Yamoor (1987) pointed out that the opportunity for self-direction in a work setting can have positive consequences for a worker's self-concept and interest in work. Thus research has examined not only the types of specific skills youth workers might gain on the job, but also psychological effects that might influence attitudes and behaviors.

An important point brought out in the research is that the influence of a particular job on a young person likely depends on the nature of the job. One study finds that "the quality of the work (i.e., its stressful or rewarding character) is a more important determinant of adolescent psychological functioning than either work status or its intensity" (Finch et al., p. 606). However, young people actually report little stress from their jobs alone; it is combining or juggling being both a worker and a student that can be stressful.

Connecting Work and School

Several researchers have observed that youth perceive school and the workplace as conflicting, not complementary, and argue that more efforts should be made to integrate the two. A study by Barbara Schneider and David Stevenson found that youth enjoy working more than they enjoy being in school.

There seems little chance that students will cease working. Thus researchers and policymakers are increasingly turning to a focus on building and strengthening connections between work and school, which should help to improve the nature of some youth work. While school-arranged work placements such as co-op and internships have been in place for years, the 1990s saw a renewed emphasis on school-sponsored work-based learning, particularly through the 1994 School-to-Work Opportunities Act. Research by Alan M. Hershey, Marsha K. Silverberg, and Joshua Haimson evaluating the effectiveness of the legislation included surveys of 1998 high school seniors, who reported that work opportunities offered through the schools had important advantages over the workplace activities students reported finding on their own. School-developed positions tended to be in a wider range of industries, and tended to more closely match students' career goals. Students with school-arranged paid jobs were more likely than other students to spend at least half their time in training on the job. They were also more likely to report discussing possible careers with adults at their workplace, and were more likely to receive a performance evaluation from school or employer staff. Students who had obtained positions through school more often reported using academic or technical skills learned in school at the workplace, and were more likely to draw on their work experience in school assignments or discussions, thus experiencing more substantive connections between their studies and work experience.

Despite the challenges of coordinating work activities through school, advocates of these arrangements hope to expand them. While there is no definitive answer to the question of whether working during the school year negatively affects students' school work, it is certainly desirable to help youth perceive school and the workplace as complementary, rather than conflicting. Since it is unlikely that young people will stop working, the idea is to help youth gain as much as possible from their employment experiences.

Mortimer, Jeylan T.; Harley, Carolyn; and Aronson, Pamela. 1999. "How Do Prior Experiences in the Workplace Set the Stage for Transitions to Adulthood?" In Transitions to Adulthood in a Changing Economy–No Work, No Family, No Future? ed. Alan Booth, Ann C. Crouter, and Michael J. Shanahan. Westport, CT: Praeger.

Mortimer, Jeylan T., and Yamoor, Catherine. 1987. "Interrelations and Parallels of School and Work as Sources of Psychological Development." In Research in the Sociology of Education and Socialization, ed. Ronald G. Corwin. Greenwich, CT: JAI Press.

Newman, Katherine S. 1999. No Shame in My Game: The Working Poor in the Inner City. New York: Alfred A. Knopf and the Russell Sage Foundation.

U.S. Department of Labor. 2000. Report on the Youth Labor Force. Washington, DC: U.S. Department of Labor.

Katherine L. Hughes

EMPLOYERS' PERCEPTIONS OF EMPLOYMENT READINESS

Employers in the business community are getting into the education business. From companies like Cisco Systems and Manpower to the Bill and Melinda Gates Foundation, American businesses and business leaders are spending millions of dollars to address what they perceive to be a deficiency in the ability of the American education system to adequately prepare students to meet the demands of the workplace of the early twenty-first century. From funding for inner city computer centers to school-to-work participation, their interest is driven by the belief that high school and college graduates are not ready to adequately contribute in the workplace. This article addresses employer perceptions of employee readiness by outlining what employers need from employees, followed by their perceptions of the readiness of new employees to contribute to the organization's ability to meet these challenges.

Concern about readiness for work is not new. There is a history of government initiatives on this topic, perhaps most notably the Secretary's Commission on Achieving Necessary Skills (SCANS) in 1991. Readiness for work entails preparedness to learn and perform on the job, the ability to continue to learn, and the personal characteristics that contribute to successful accomplishment of work. According to Harold F. O'Neil Jr., Keith Allred, and Eva L. Baker, general categories of readiness skills consist of basic academic skills, higher order thinking or problem solving skills, interpersonal and teamwork skills, and attitudes or other characteristics such as the willingness and ability to take initiative and responsibility.

Organizational Needs and the Employment Environment

Perceptions of readiness are based on a framework of organizational needs that have been influenced significantly in recent years by changes in the competitive environment, in technology, and in theories of managerial best practices. Intense competition has forced organizations to become more customerfocused, with greater emphasis on understanding and quickly satisfying customer needs and on responding rapidly to changing customer preferences. Whereas Harry Braverman argued in 1974 that the technologies of the future would reduce workers to button-pushing automatons, the opposite has been the case. Workers at low levels of the organization are often expected to perform across a range of roles and responsibilities and must take initiative and use judgment in determining how to best satisfy customer needs and keep their team running smoothly. Whether responding to customer needs, competitor activities, or rapidly changing technology, the organizational imperatives are clear: speed, agility, and adaptability are crucial. Traditional command-and-control hierarchies with narrow, highly structured, routine jobs and tightly supervised workers are poorly suited to this kind of environment. Instead, organizations today are often more flexible, utilizing team-oriented, decentralized structures that empower lower-level workers to make decisions and take initiative.

Employer perceptions of employee readiness are influenced by a dynamic interplay among evolving organizational needs, educational institutions' practices, and the preparation of the students who enroll in educational institutions. These factors have changed the employers' needs and expectations of employees on all fronts. First, to function effectively in the twenty-first century workplace, employees need greater ability in the basics such as reading, writing, and arithmetic. Thus, employers desire workers with more formal education. In fact, whereas jobs requiring at least a bachelor's degree constituted 21 percent of jobs in 2000, they are forecast to comprise 29 percent of jobs by 2010. Employers expect employees to have the interpersonal skills necessary to communicate, solve problems, coordinate activities, and resolve conflict. Employees also need to possess the ability to self-manage, take initiative, and engage in self-directed learning. Moreover, employers want employees who are ethical and flexible. Research by Kristy Lauver and Huy Le shows a relationship between higher levels of emotional stability, agreeableness, and conscientiousness and lower numbers of workplace accidents.

Perceptions of Readiness

Employers tend to expect schools to build general skills such as basic knowledge, discipline, professionalism, good work habits, the ability to communicate, openness, perseverance, problem-solving ability, and well roundedness. Employers have not seen schools as being effective in producing specific, jobrelated skills, and employers do not view schooling as the sole or even primary source for developing such skills. For example, Madelyn Schulman's 1999 study of high school interns in school-to-work transition across various occupations revealed that, once at work, interns found themselves in an environment of which they had little or no understanding. Furthermore, 73 percent of managers in one survey described in The Lessons of Experience (1988) indicated that they used the skills taught in their master's of business administration (MBA) programs either "marginally or not at all" in their initial managerial assignments. Lynne Leveson reports that despite the efforts invested in building general competencies, the essential differences in the educational environment and the work environment create the inevitability of certain discontinuities between the two. Thus, many employers believe that job-related skills are company-specific and best acquired on the job and see the schools' role as making people trainable.

Daniela Gabric and Kathleen L. McFadden reported in 2001 that both employers' and students' judgment of the value of general skills such as working in teams, problem solving, and effective communication was significantly higher than the value of technical skills (which were still important but to a lesser degree). This approach is consistent with an ability to address the ever-changing demands from the competitive environment. However, despite the fact that both students and employers see great value in these general skills, employers still see schools as falling short. As noted above, this can be inferred from the actions taken and expenses incurred by employers to increase the readiness of individuals before, and as, they reach the workplace. In addition, anecdotal comments from employers suggest that many people in the early twenty-first century are coming out of school with a genuine lack of basic skills. Such comments are supported by empirical data from a variety of organizations. For example, Donald F. Treadwell and Jill B. Treadwell studied employers of communications graduates from multiple business sectors. They found that only 18.5 percent of the employers reported that new hires could perform the duties for which they were hired without additional time investment in training. The most critical weaknesses cited were the ability to write effectively for multiple audiences, to write persuasively, to engage in logical or critical thinking, and to work responsibly without supervision. In this area alone, problems resulting from poor written communication have been estimated to cost U.S. businesses more than $1 billion annually.

Employer and Employee Agreement

In order to address employee readiness, it is important for employers, employees, and educational institutions to recognize that there is, in fact, a problem. Are the perceptions of employers and new employees similar regarding employees' readiness for work?

John Arnold and Kate Mackenzie Davey examined whether new employees rated themselves comparably with their new managers on various work place competencies, including company know-how, interpersonal skills, product and service knowledge, specialist skills and knowledge, and achieving results; their findings indicated that perceptions varied between the two groups. Overall new employees rated themselves higher in skill level than did their managers. However, both new employees and their managers were least confident about the new employees' knowledge of the products and services of their organization and its competitors.

Similarly, differences have been found in the skills or traits deemed to be most important by employers and students about to enter the workforce. Gabric and McFadden noted that one of the major differences between employers' and students' ratings was in how highly they ranked the skill of conscientiousness. In a ranking of 34 personality traits, "being conscientious" was ranked sixth most important by employers but eighteenth by students, suggesting that students may not realize how important employers consider conscientiousness to be in employees.

Reducing the gap between new employee abilities and employer expectations may be facilitated by providing students with a better understanding of what qualities and characteristics employers value most and an accurate assessment of where students currently rank on these competencies and traits. Both schools and employers can assist in this process. Teachers may need to learn more about what employers want, do a better job of conveying this information to students, give students feedback, and encourage students to learn in applied settings as well as in the classroom. Employers may assist by providing internships and summer jobs that expose students to employer expectations, and by providing feedback to the students.

Conclusion

In sum, employers see schools as responsible for preparing students for productive work. Changes in technology, managerial practices, and the competitive environment have raised the level and breadth of knowledge, skills, and abilities that employers require from employees. This has further widened the already significant gap between employer needs and the actual skill levels and abilities of the graduates who enter the labor pool. Employers recognize that some forms of training are best conducted on the job and do not expect schools to produce students with specific job skills. However, employers expect schools to produce students with the ability to use general knowledge and with traditional academic skills such as reading, mathematics, writing, oral communication, and problem solving. Employers would also like schools to prepare students with general characteristics that enhance work performance, such as the ability to work productively with others and demonstrate initiative and responsibility.

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REASONS STUDENTS WORK

Most American teenagers work for pay; figures vary depending on whether labor force participation is measured at a particular point in time or over the course of several years. A U.S. Department of Education survey published in 2000 found two-thirds of twelfth graders saying that they worked for pay; other research asking high school students if they have ever worked has yielded even higher figures.

Beginning in the 1980s, researchers have increasingly paid attention to this phenomenon. Yet rather than exploring the reasons for the high incidence of youth employment, for the most part researchers have engaged in a study and debate of the costs and benefits to American youth of their working. Much of the literature has focused on whether working has detrimental effects on young people's engagement in school and academic outcomes, as well as youth's social and psychological development. While some studies have found a negative relationship between the number of hours worked during the school year and school attainment measures, David Stern and Derek Briggs's review of the literature concluded that students who work moderate hours perform better in school than students who work extensively or not at all.

In addition, some of the research is not able to fully sort out the direction of causality, for example, whether students with lower grade point averages tend to work more hours or whether working lowers the grades. Thus negative effects could be due to selection, that is, the possibility that students who are already not engaged in school choose to work more. In The Ambitious Generation, Barbara Schneider and David Stevenson report their findings that youth generally enjoy working more than they enjoy being in school.

There has been surprisingly little research examining why youth work, or why many work quite long hours. Youth employment has tended to be studied after the fact, rather than examining reasons or motivations leading to employment. That high school students have part-time jobs has come to be seen as the norm, likely due to the American cultural emphasis on occupation as a primary component of identity, and appreciation for work ethic and entrepreneurship. American youth do tend to start working earlier and work more than youth in other countries. And research has found that adults have quite positive retrospective views of their own early jobs, as well as favorable attitudes about their children's employment.

Some researchers speculate that the motivation for working is entirely financial, as it has been estimated that 54 percent of American youth receive no allowance, as reported by James R. Stone III and Jeylan T. Mortimer in 1998. Certainly American youth require money to participate in the automobile culture and buy the consumer goods that are significant parts of society. Hence, youth do tend to give the reason for working as "to buy things," according to Mortimer and colleagues in a report published in 1990. Teenagers from poor families in particular need to work so that they have money with which to participate in youth culture. Poor and immigrant youth also tend to share their earnings with their families. And some teenagers work primarily to save money for college, which appears to have positive effects on several outcome measures such as the likelihood of attending college and educational aspirations.

There are other reasons for working aside from monetary gain. Researchers have found that some young people seem to have an internal drive towards working; they like to be occupied by productive activity. In 2000 Mihaly Csikszentmihalyi and Barbara Schneider reported that the young people they studied who spent the most time working perceived work more positively than young people who worked less, and saw work as important to themselves and to their future. Finally, the young fast-food workers in Harlem that Katherine S. Newman reported about in No Shame in My Game: The Working Poor in the Inner City needed income but also sought work in order to have a safe, structured place to go, away from the pressures of street violence.

In keeping with the idea that paid employment is the norm for American youth, researchers have examined why some youth do not work. It is well-established that work experience is more common among upper socioeconomic status and white teenagers. Most experts believe that this is due to a lack of employment opportunities for poorer youth, rather than less desire for work. According to Csikszentmihalyi and Schneider's Becoming Adult: How Teenagers Prepare for the World of Work (2000), upper class youth are more likely to work during the summer than during the school year, however, likely reflecting a concern about work interfering with studies. However, the minority youth in this study had a more positive view of work than the other young people.

Based on the types of jobs American youth tend to hold, it is unlikely that they are working in order to learn about possible adult career fields. Young people's first paid jobs tend to be informal (or "freelance jobs," as the U.S. Department of Labor refers to them), such as child care and lawn work. As youth progress into their mid-teens, the majority work in retail, which includes eating and drinking establishments such as fast-food restaurants. Even affluent teenagers tend to hold jobs, such as camp counseling and life guarding, that they are not likely to pursue as career fields. To remedy this situation, the 1990s saw a renewed emphasis on school-sponsored work-based learning, particularly through the 1994 School-to-Work Opportunities Act. Research on work opportunities offered through school has found that those positions tend to be in a wider range of industries and tend to more closely match students' career goals. Advocates hope that youth can gain more than money from their employment experiences.

Employment

Employment

Employment measures the number of employees in a country, region, or sector. Employees are generally defined as persons on payrolls, that is people who are compensated for the work they perform. Depending on the particular definition, this may or may not include self-employed people, also called proprietors, who work for themselves. Along with unemployment, employment (including proprietors) constitutes the labor force. Including people working without pay, for example housewives, volunteers, and sometimes armed forces, one obtains the workforce. Finally, all the population capable of working constitutes the manpower.

Measurement of employment is quite diverse across countries, which makes cross-country comparisons difficult. There can be variations in definitions, coverage, data collection methods, information sources, and estimation methods. For example, the United States publishes employment data from two different sources. The National Current Employment Statistics (the so-called establishment survey) from the Bureau of Labor Statistics does not cover agriculture, hunting, forestry, fishing, the armed forces, and private household services. Sick leaves, paid holidays, and employees on strike (but not the whole period) are counted. The Current Population survey (the so-called household survey), also from the Bureau of Labor Statistics, covers the civilian population sixteen years of age and older in all sectors, except armed forces. It counts as employees those who “(1) did any work at all as paid employees, worked in their own business or profession or on their own farm, or worked fifteen hours or more as unpaid workers in a family-operated enterprise; and (2) all those who did not work but had jobs or businesses from which they were temporarily absent due to illness, bad weather, vacation, childcare problems, labor dispute, maternity or paternity leave, or other family or personal obligations, whether or not they were paid by their employers for the time off and whether or not they were seeking other jobs.”

Intertemporal comparisons of employment are more reliable, although they can also be subject to changes in definition or coverage. For example, the introduction of child labor laws and mandatory schooling has increased the minimum age considered for employment statistics.

Most frequently, employment data is based on surveys, sometimes complemented by various techniques to increase precision or interpolate between data points. Employment may also be inferred from data provided by trade unions, trade associations, social security administration, or other government agencies.

The sectoral composition of employment has changed considerably in human history. Because under a strict definition of employment self-employment is not considered, a labor market with an explicit exchange of work for payment evolved sometime during the last millennium, after both the introduction of money and the existence of surplus labor in agriculture. This surplus labor made the specialization of tasks possible, in particular for various manufacturing trades. Once production expands beyond the abilities of a family, external labor needs to be hired and a labor market is born. The extent of this labor market has been very limited, however, for a long time, in particular as slavery and servitude are not considered to be employment. It is the Industrial Revolution that allowed a significant take-off of employment, through the creation of factories where proprietors constituted a very small minority of workers and the preceding second agricultural revolution that created significant excess labor on farms. Even in the twenty-first century, employment measures typically exclude agriculture, as the latter is still considered to be largely the domain of proprietors.

In all industrialized economies, employment has thereafter gradually shifted toward services, which now typically constitute a larger share of employment than manufacturing. Employment also requires better skilled workers and has an ever-increasing share of female employees. Better skills are required to operate or monitor more sophisticated machinery, to provide more elaborate services, or to use computers. The increased female involvement in employment can be traced back to two main factors: (1) the emancipation of women breaking the traditional role of the housewife, along the decline of the wage gap with men; and (2) significant improvements in technology used in housekeeping (such as washing machines and vacuum cleaners) that made it possible to pursue paid work outside of the house.

One source of considerable controversy is whether technological progress has a positive impact on employment or not. As was the case with the Industrial Revolution, rapid technological progress can lead to a massive sectoral reallocation of employment, which does not necessarily mean a reduction in employment. For example, while the introduction of the steam engine rendered horses obsolete for most of their original tasks, such obsolescence is more difficult to reach for humans, given their versatility and their ability to adapt. But this still happens, in particular for workers close to retirement. On a more microeconomic level, technological progress simultaneously destroys and creates jobs. In this context, several kinds of technological progress can be identified, depending on how they alter the aggregate capital/labor ratio in the production progress; it is labor augmenting if progress reduces this ratio, labor saving otherwise, or non-biased if it leaves the ratio unchanged. Over the long term, the capital/labor ratio has increased steadily, both through capital accumulation and through a reduction in the work hours. The labor income share, however, does not exhibit any particular trend and there is no conclusive relationship between the unemployment rate and various measures of the growth rate.

The last two decades of the twentieth century witnessed another important development: globalization. The wage pressure from developing or emerging countries influenced employment, in particular for low skill jobs in manufacturing, but also increasingly for higher skilled positions in services. There is, however, no agreement among scholars whether this impact has been significant at the macroeconomic level (it certainly was in some sectors of the economy), and whether it has been negative at all. Indeed, while some jobs were “exported,” the availability of intermediate goods at lower prices increased the productivity of some sectors that then expanded. It is, however, clear that lower skilled workers face reduced employment opportunities, a phenomenon that started even before globalization accelerated.

One important distinction in the labor market is between formal and informal employment. There are many definitions of informal employment, the most common being employment that escapes taxation and regulation, and thus is not protected by the government: Various social programs do not apply to informal workers, such as unemployment insurance, social security, some labor laws (in particular the enforcement of contracts), or invalidity and accident coverage by the government. Informal employment is much more widespread in developing economies, where social programs are less common and tax authorities have less control. Yet informal employment is still present in developing economies; for instance in 2000 Friedrich Schneider and Dominik H. Enste estimated informal employment to reach around 10 percent of employment in the United States, higher in other countries, typically those with higher labor income tax rates or inefficient taxation.

As the informal sector escapes regulation, it is generally viewed that it should be limited. In many cases, however, it is a response to overregulation or corruption. Workers may migrate between formal and informal sectors as opportunities arise, the informal sector often being regarded as a stepping-stone in which skills are learned before being hired in the formal sector. Accordingly, wages are lower in the informal sector. Informal firms are typically family based and small, have low productivity, and have very low capital intensity. Workers are hired on a casual basis on arrangements of short duration.

One aspect of labor markets, especially in developing economies, is child labor. One commonly defines child labor as the participation of school-aged children on a regular basis in the labor force in order to earn a living for themselves (street children) or to supplement household income. The International Labour Organization (ILO) divides child labor into three categories: (1) labor that is performed by a child who is under the minimum age specified for that kind of work defined by national legislation, and that is likely to impede the child’s education and full development; (2) labor that jeopardizes the physical, mental, or moral well-being of a child, either because of its nature or because of the conditions in which it is carried out, known as hazardous work; (3) the unconditional worst forms of child labor, which are internationally defined as slavery, trafficking, debt bondage and other forms of forced labor, forced recruitment of children for use in armed conflict, prostitution and pornography, and illicit activities.

The national laws of most industrialized countries abolished child labor by the end of the nineteenth century. However, in 2000 Douglas Kruse and Douglas Mahony estimated that several hundred thousand children work illegally in the United States. Worldwide, the ILO estimated (with considerable uncertainty) that 218 million, or 16 percent of children aged five to eleven were working in 2004, 126 million in hazardous work.

The ILO pushes very hard to eliminate child labor where it is the most prevalent, in developing countries. While the strategy is generally to have governments ratify conventions and implement child labor laws, those methods are often insufficient. As long as schools are sufficiently effective in providing education (not a given), parents are very aware of the high returns to education. Yet they often send their children to work because their contribution is needed to sustain household income. As the children do not get an education, their income as adults will be too low to allow their offspring to go to school. Breaking these vicious circles is the key to eliminating child labor, as the implementation of child labor laws in North America or Europe has shown.

All economies are subject to fluctuations and one important aspect of business cycles is the systematic changes in employment. Indeed, in most cycles and most economies, employment and gross domestic product (GDP) evolve in tune: GDP and the total number of hours worked typically reach their peaks or troughs at the same time and fluctuate about as much. Employment, however, tends to fluctuate (in percentage terms) less than GDP and tends to lag the movements of GDP by a few months. While these regularities can be observed across all economies, there are some striking differences. For example, fluctuations in total hours worked in some economies tend to happen on the intensive margin (hours per worker) rather than on the extensive margin (employment). In other words, there are more changes in overtime or undertime than hiring and firing. This is true for several European economies, but not for the United States, primarily because of the influence of labor laws, labor market traditions, and unions.

There are also clear patterns through the business cycles in terms of hiring and firing. Plant level studies have revealed that most of the fluctuations in employment can be explained by job destructions: These are high in a recession and low in booms. Job creations are, however, much more stable through the business cycle. It is also generally observed that employment fluctuates significantly more for less educated workers.

Many government policies affect employment, and it is impossible to review them all. One can distinguish between those that have an impact on the average level of employment, and those that try to mitigate employment fluctuations. Whenever policy is involved, some welfare criterion needs to be established if one is to determine whether policies are good or bad. In this respect, psychologists consider that it is good for people to be employed, as this improves their self-esteem. Sociologists would consider the negative impact on one’s standing in society due to unemployment. Employment of women is considered to be a necessary part of their empowerment. Economists consider the fact that people would not necessarily want to work: They appreciate leisure more than work, and one symptom of this is that they are paid to work, instead of paying for this privilege. However, employment is a way to obtain the income necessary for consumption and savings. There are also various frictions on the labor market, such as the transaction costs and the difficult matching process between vacancies and unemployed workers, which make full employment unattainable. Thus, high employment is preferable, but not at any cost. However, child employment should be reduced to a minimum. Also, given that households generally do not like fluctuations in income, as they imply fluctuations in consumption, policies that stabilize employment are considered preferable, as long as they do not reduce average employment too much.

Employment is influenced indirectly but sometimes significantly by various policies, such as provisions of the tax code. For example, high or increasing marginal tax rates are known to discourage the participation of spouses on the labor market. The so-called marriage penalty in some tax codes—whereby the incomes of two spouses are added to determine the tax rate instead of considering the incomes separately—has the same effect.

Employment policy is enacted to improve working conditions or facilitate the employment opportunities of some workers. Those categorized as active employment policies include job placement agencies, labor market training, and subsidized employment. Passive policies include unemployment insurance and early retirement programs. Scholars, including David Grubb and John Martin, debate the effectiveness of these policies, in particular in light of their costs, which lead to an indirect discouragement of employment through higher tax rates. Or a generous unemployment insurance system may also encourage unemployed workers to reject job offers in the search of better matches, thereby lowering employment and increasing the costs to fill vacancies.

Labor laws are put in place to prevent abuses and to organize the labor market. They may also have perverse effects on employment. For example, laws putting restrictions or making it more difficult to lay off workers may prevent them from being hired in the first place, especially in sectors where employment would exhibit stronger fluctuations or where workers may have private information about their qualifications. Finally, generous minimum wage laws are generally thought to have adverse effects on employment, as some employers would not open vacancies if wages have to be higher. While there is controversy in the literature about this, the employment effects of minimum wages may simply be small.

This discussion may give the impression that any intervention in the labor market has harmful effects. Labor markets have particular characteristics that make government intervention necessary, but without excess as negative indirect effects may outweigh positive direct effects. The right to unionize is enforced to counter the monopoly power that employers have in a very fragmented labor market. But too much union power leads to excessive negotiation power for employees, and then to high wages that prevent the hiring of additional workers.

Stabilization of employment through the business cycle is generally viewed through the lens of avoiding fluctuations in unemployment. Monetary policy has a long tradition of playing with the trade-off between (expected) inflation and the unemployment rate, the so-called Phillips curve. Monetary policy has, however, shifted from an active stance in the Keynesian tradition to a more passive stance seeking to stabilize inflation at rather low levels. It has been recognized that monetary policy can do little about (un)employment due to large delays and uncertainty about the impacts.

Fiscal policy has and is still being used for stabilization purposes in some countries, but again the tendency is toward a hands-off approach. Where it is applied, it is through public works programs, temporary tax breaks directed to firms to encourage hiring or to prevent layoffs, or income tax breaks to encourage consumption and economic activity in general. Again, such policies are not generally viewed to be advisable as delays in implementation or effectiveness are typically longer than a recession. However, they have a certain political appeal.

employment

employment The supply of labour by persons of either sex for the production and processing of all primary products (such as the characteristic products of agriculture, forestry, and fishing); the processing of primary commodities to produce such goods as flour, cheese, wine, cloth, or furniture, whether for the market, for barter, or for own consumption; and for the production of all other goods and services for the market. This broad definition ensures that the concept is applicable to statistics on market economies, command economies, mixed economies, and subsistence economies. It covers the production of goods and services normally intended for sale on the market, goods and services supplied by government agencies and the nonprofit sector, and certain types of production for own consumption (non-market production). In Western industrial societies, a much narrower definition is conventionally applied in official statistics—namely work for pay, profit, or family gain, within a specified reference-week—thus limiting the concept to work in the market economy, which is reflected in national economic accounts and gross national product. Employment can also be defined with reference to a person's usual activities rather than their current activities.

Sociologists frequently ignore these precise, and essentially economic definitions of employment (often termed economic activity by economists), in favour of the much more general notion of work, which has a different, wider meaning. Many disagreements and debates have their origin in a failure to distinguish clearly between work and employment. To make matters worse, work is regularly used as a synonym for paid employment or market work in everyday discourse, and in social science reports. Hence, for example, work-rates are synonymous with labour-force participation rates and economic activity rates in scientific (especially economic) papers. See also BLACK ECONOMY; HOUSEHOLD WORK STRATEGY; LABOUR-MARKET; LABOUR RELATIONS; OCCUPATIONAL SEGREGATION; WAGE-LABOUR.

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employment

em·ploy·ment
/ emˈploimənt/
•
n.
the condition of having paid work:
a fall in the numbers in full-time employment. ∎
a person's trade or profession.
∎
the action of giving work to someone:
the employment of a full-time tutor.

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